Wednesday, May 23, 2012

The fallout from the Facebook IPO has now stretched far beyond the drop in stock price. On Tuesday, Morgan Stanley was issued a subpoena to appear before a District Court on the grounds they pre-loaded information to 'certain investors', while at the same time allowing retail to walk into a money trap.

Today, the repurcussions of the largest IPO in history took another turn as Nasdaq cited 'technical problems' which kept many traders from receiving confirmation of their purchases for more than two hours on Friday.

As the WSJ reports: "A senior Nasdaq Stock Market official told customers Tuesday afternoon that it would have pulled the plug on Facebook Inc.'s initial public offering had it known the full extent of the technical problems that plagued its systems. On a conference call with brokers after Tuesday's close, Eric Noll, head of transaction services, said the exchange "by no means would have gone forward" with the much-watched Facebook debut if it had known problems would disrupt a "normal trading day." "In retrospect, it was incorrect," - Zerohedge

What this boils down to is that the potential of today's high frequency trading in the markets (up to 75% of all trades), could quite feasibly killed the market for Facebook, as volume on opening day literally put the mega-machines on tilt.

There is a reason Lindsey Williams said on Coast to Coast AM on Monday that the elite NO LONGER PLAY THE STOCK MARKETS, and that paper trading is simply opium for the masses to make them FEEL wealthy, while using this platform to rob the wealth from the public.